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The economic resident agent in Panama is disappearing due to the impact of new regulations and many corporations are left without one. Looking for one?
The economic resident agent in Panama has been a key figure in the world of corporations for many years. However, recent regulations and requirements imposed by the Financial Action Task Force (FATF), the Organization for Economic Cooperation and Development (OECD) and the European Union (EU) are drastically changing the economic landscape in the country. What is happening and how does this affect the economic resident agent in Panama?
Panama has adopted a series of laws and measures to comply with international standards of fiscal transparency and to combat money laundering. These measures are crucial to get out of the discriminatory lists that threaten the country’s economy. However, the direct consequences are being felt in the business of Panamanian corporations.
One of the main implications for corporations is the suspension when they do not have a resident agent for a period of more than 90 days. According to data from the Public Registry, in the last two years, more than 68,000 corporations were disqualified due to non-payment of the one-time annual fee of USD 300. This has left these companies in a “suspensive” status, depriving them of corporate rights and hindering their normal operation.
Law 254 of November 2021 has imposed greater obligations on resident agents, which has led to a high record of resignations. Not to mention that the cost of this service has skyrocketed. The new regulation requires legal entities to send accounting information and supporting documentation to the resident agent, in addition to knowing the identity of shareholders and beneficial owners. In turn, resident agents must report to the Panamanian government on the companies’ compliance with these requirements. Failure to comply with these obligations may result in significant financial penalties.
Massive resignations of resident economic agents
This scenario has generated a wave of massive resignations of resident economic agents, with public deeds containing up to 500 corporations. The lack of updated information and the difficulty to keep up to date with regulations have led many agents to take this measure to avoid penalties of at least US$5,000 per company. However, these mass resignations are collapsing the system and generating delays in other services of the Public Registry.
The impact extends beyond corporations. Bank accounts in the name of these companies are also affected, as they must be suspended or dissolved if they lack a resident agent. Although the impact on the banking sector is not yet clear, it is expected to have significant consequences.
In summary, the new regulations in Panama are transforming the role of the economic resident agent and are having a significant impact on corporations and the economy in general. Massive resignations of resident agents, financial penalties and delays in procedures are generating an environment of uncertainty and challenges for companies.
It is important to note that these measures are being implemented with the objective of complying with international standards and improving fiscal transparency in the country. However, it is also crucial to find a balance that does not negatively affect business activity and the Panamanian economy in general.
Against this backdrop, companies looking for a cost-effective and experienced Panama resident agent can find solutions in firms such as Caporaso & Partners. This law firm offers resident agent, nominee director and Bearer Shares Custodian services, providing affordable and professional options to comply with legal and regulatory requirements.
Without CUR the lawyer cannot be a Resident Agent
New regulations in Panama are transforming the role of the economic resident agent and generating a series of challenges for corporations and lawyers. It is essential for companies to be aware of the legal obligations and requirements, and to seek reliable solutions to ensure compliance with the regulations without putting their business operations at risk.
Within the framework of the creation of the Registry of Resident Agents in Panama, it is established that lawyers must meet two requirements to act as Resident Agents: to have the suitability issued by the Fourth Chamber of General Business of the Supreme Court of Justice of the Republic of Panama and to obtain the Unique Registration Code (CUR).
The CUR is assigned by the Intendencia de Supervisión y Regulación de Sujetos no Financieros and is an indispensable requirement to carry out the procedures as Resident Agent on behalf of legal entities. Therefore, lawyers who do not have both the qualification issued by the Fourth Chamber and the CUR will not be able to practice as Resident Agents in Panama.
The purpose of this measure is to regulate and supervise the activities of Resident Agents, ensuring that they comply with the established legal requirements and contribute to maintain transparency and regulatory compliance in the country.
